Colombia's rising fortune

Without a doubt, Colombia has come a long way over the past ten years. In the late 1990s and early 2000s, the country was suffering from widespread violence, a mortgage bust, and a budget crunch. Today, the security situation is much improved, foreign investment has increased, and commodity prices and oil output have risen. This recent good news does not, however, put them in the clear. For instance, they must take measures to deter a flood of foreign capital that could send the peso increasing at a rapid rate. Colombia's government is also under pressure to spend more money. Despite the military gains against the FARC guerrillas, many feel that more money still needs to be spent on security. Additionally, parts of the country desparately need better infrastructure. Finally, the country is suffering from high income inequality leading to pressure for social spending. Colombia is facing the demands of conflict and post conflict spending and it will be interesting to see how they respond in the years to come. So far they have slashed tax breaks and are presently trying to pass a Chilean-style fiscal rule to limit the deficit. Juan Carlos Echeverry, the finance minister, is confident that the government's economic plan will be able to handle their current situation.